The Bank of England will not hesitate to change interest rates as necessary to bring inflation back to the 2% target over the medium term in line with its remit, British central bank governor Andrew Bailey said in a statement.

“At its next scheduled meeting, the Monetary Policy Committee (MPC) will fully assess the impact on demand and inflation of the government’s announcements and the fall in sterling and take appropriate action,” he said. – ‘The role of monetary policy is to ensure that demand does not outstrip supply in a way that leads to higher inflation over the medium term.”

The Central Bank’s next meeting is scheduled for Nov. 3.

Also on Monday, the Bank of England announced another round of stress tests of the country’s biggest banks, which will again be annual. Last year’s testing was conducted for the first time in two years due to the COVID-19 pandemic, and it was postponed this spring due to the outbreak of the conflict in Ukraine.

During the stress tests, the central bank will, among other things, “test the resilience of the banking system to deep simultaneous recessions in the UK and global economies, significant falls in asset prices and higher global interest rates”, it said.

The Bank of England will use their findings to determine the ability of banks to withstand an unfavorable scenario. The central bank aims to ensure banks are able to absorb, rather than amplify, shocks and continue to serve UK households and businesses.

“Stress tests are not a forecast of macroeconomic and financial conditions in the UK or overseas based on the current geopolitical situation and the government’s response to it. It is a tough but plausible scenario that assesses the resilience of UK banks to a range of adverse economic shocks,” the Central Bank said in a press release. The results of the test will be published in the summer of 2023.